AEP's sales edge up for first quarter, but profits ebb

American Electric Power has begun the year with a small increase in sales and a small decrease in profit, the company said this morning.

American Electric Power has begun the year with a small increase in sales and a small decrease in profit, the company said today.

First-quarter sales were $3.6 billion, up from $3.5 billion for the same period last year. Profit was $344 million, down from $360 million last year.

"For several quarters, we've been seeing some signs of economic improvement in the states that we serve, but the signs have yet to be followed by a broad increase in electricity demand that typically accompanies economic improvement," said Michael Morris, chairman, president and CEO, in a statement.

The numbers include a $21 million charge to account for the company's estimated costs related to the recently passed health care law. AEP is one of several large companies to take this kind of action.

"(W)e had to make (an accounting) adjustment thanks to our friends who passed the Patient Protection and Affordable Care Act, which of course is anything but that, to reflect the change in the tax treatment for retiree medical benefits under Subpart D," Morris said in a conference call with analysts.

Because of the slow economic recovery, the Columbus-based utility said earlier this month that it would offer buyouts to all employees in the hope that it can reduce its work force by 5 percent to 10 percent. The company employs 21,700, including several thousand in central Ohio.

"As always, our top priorities are maintaining reliable service for our customers, a safe work environment for our employees and our commitments to our shareholders," Morris said today.

Residential electricity sales are up from a year ago, he said, while industrial sales are down slightly.

The company reaffirmed its forecast that it would earn between $2.80 and $3.20 per share for the year.